As the hype around Bitcoin (BTC) has faded, institutional investors and portfolio managers have begun looking at the major cryptocurrency as a “serious venue” to invest in, claims Fred Pye, CEO of 3iQ, Canada’s first Bitcoin fund issuer.
In an interview with Cointelegraph during the Bitcoin 2023, Pye spoke about how Canada’s advanced crypto trading regulation has drawn investors to the digital assets market.
According to Pye, fund managers and institutional investors running diversified portfolio assets seek alternative investment strategies amid a global inflationary environment and macroeconomic challenges.
“The FOMO in Bitcoin is gone; it’s all moved over to AI [artificial intelligence]. So now the institutions and the proper portfolio managers — the people that are responsible for running diversified portfolios — are now starting to take a look at Bitcoin as a serious venue.“
It is not just about maximizing profits, says Pye. For institutional investors, crypto use cases will be a growing trend in the next few years. “The theme for 2024 going forward is definitely use cases. So, we’ve got this beautiful technology, now let’s put that beautiful technology to work,” he stated.
Regulatory challenges for institutional adoption are nothing new, but Canada has taken the lead in launching crypto exchange-traded funds (ETFs) amid the United States Securities and Exchange Commission’s relatively negative stance toward crypto.
An ETF is a portfolio of assets with shares traded on a stock market. It blends the characteristics and potential benefits of mutual funds, stocks and bonds.
Canadian regulators have approved several crypto ETFs recently, including Bitcoin and Ether (ETH) products from 3iQ, Purpose Investments and Evolve Funds Group, attracting millions of dollars to the crypto products.
“They’ve never been mispriced,” said Pye about running regulated digital assets ETFs in Canada, adding that “there’s no difference about running a Bitcoin ETF than running a gold ETF. We track the price of Bitcoin identically. They’re low fees, and it works. […] We can cipher trace where the Bitcoin comes from, so we’re only purchasing clean Bitcoin. And I think these are all the characteristics that people are concerned about.“
Canada’s latest initiative toward digital assets relies on public consultation about a central bank digital currency, with the local monetary authority asking what features the country’s citizens want in a potential digital Canadian dollar. Canadians’ consultation results are expected to be published later this year.